The representative plaintiff in a certified securities class action sought court approval of a settlement, class counsel fees, and a modest honorarium under the Class Proceedings Act, 1992.
The proposed settlement required the defendants’ insurers to pay $2.25 million for distribution to class members alleging misrepresentations affecting publicly traded shares.
The court found the settlement fair, reasonable, and in the best interests of the class after considering the likelihood of success, litigation risks, and the absence of objections.
However, the court declined to approve the proposed cy près recipient because of connections between class counsel and the proposed organization, concluding that such links created an inappropriate indirect benefit to counsel.
The settlement and counsel fees were approved subject to the parties proposing a different cy près recipient.